Topic: Faster bitcoin transaction times - page 3. (Read 12428 times)

This is often stated, but has been demonstrated not to be true.

Since mining is a random process with a poisson distribution, there is no accumulation of progress that happens between blocks.

6 blocks with a total network hashrate of 1 PH/s is equally secure at 5 minute intervals, 10 minute intervals, or 20 minute intervals as long as there is no network latency and all participants can handle the bandwidth requirements.

shorter time between blocks would mean we'd have to wait for more confirmations for the same level of security.
It does help with the 7tx/sec limit and gives more granularity in the level of security that you want, but if you had to wait 20 mins for 2 confs then you'd still have to wait 20 mins for 4 confs or you wouldn't have the same security

I think LTC proved that 2,5 mins can work, (async protocols like stratum helped with the problem of wasting power in old blocks) but I'd recommend against anything lower than that.

The idea that third-party solutions will fix 0-conf... it completely throws the baby out with the bathwater.  Sure, it could work -- Visa works.

But it would no longer be bitcoin.  It would no longer be a global peer-to-peer currency.

There is a third option, aside from third party involvement and shorter block times.  The third option is innovation in the bitcoin consensus system itself.  Economic incentives keep miners following the rules today.  It may be possible to add incentives that lead to 0-conf transactions being very reliable in practice, on a time scale much shorter than 10 minutes.

Yeah 10 minutes is too long, but sometimes It takes more than 15 minutes for confirmation.
We're really need faster confirmation time.

At present, transaction time is faster than before and I don't think it would increase more soon.

I think the experienced bitcoin people are the ones that really understand why this isnt a viable solution to the transaction times, which are not actually a high level problem.

What is called 0-confirmation transactions can be used for things like buying coffee at Starbucks. Situations like that where the transaction times need to be just a few seconds. I'm thinking of Bitcoin as a system that can handle all (or at least most) forms of currency transactions, including very stressful shopping and other payment situations where transaction times of a few seconds are desired or even demanded.

But, then there is another problem and that is a too bloated block chain. Imagine if bitcoin became mainstream with as many transactions per second globally as Visa. In theory a slight adjustment of the Bitcoin protocol may be able to handle such large amounts of transactions, while in practice it may be too much to handle.

And also, small bitcoin transactions would have a very high fee, percentage wise.

A payment channel system would take care of both the problem of slow transactions and a potential future very high transaction rate.

I do think that transaction times can be increased, but not upto much extent. The current rates seem ok, unless you are in hurry.

Yes the fast transactions would have to be synched with the bitcoin blockchain. With the current proposed solution, as I understand it, a customer would need to prepay one payment channel for say Starbucks and another payment channel for Amazon and so on; one separate channel for each service. That's really problematic. A solution is needed where there is a whole distributed system of payment channels. Then the customer only prepays into that single system. And all the different recipients use the same system. So it would be the same kind of technique with the use of the blockchain with the difference that it would be a whole network of payment channel servers instead of each payment channel being a separate silo. I don't know yet if that's possible to implement in practice though.

You're essentially paying for space on the blockchain. You have to pay once for each recipient. It's not off-chain.

Wrong

It can be faster but current times are good too. If you are paying extra fee for faster confirmations, then it takes not less than 3 minutes for multiple confirmations.

My inputs: (pun intended, as that's the name of wallet service that died in glorious flames.)

1. Off chain transactions. All modern gambling / gaming sites do this. Some online wallets did this. Some payment processors do this. You deposit once. You play hundreds of times, sometimes several times per second, depending on what game you're into (dice, poker, slots, blackjack, card games, etc), then you can either sit on the balance or cash out later. The problem here is trust.
2. On chain transactions are typically broadcasted and accepted by 90% of the entire bitcoin network within 10 seconds. I believe the term is called "transaction confidence" or something like that. Good transactions usually mean you pay the bitcoin transaction fee, and there are no detected double spend attempts within those 10 seconds.

On a personal level, if I ask someone to pay me some bitcoin, I give them the address and wait for their transaction to appear on my client. Then I go on blockchain and look at it. I usually accept it as good even without a confirmation as long as I can see that the minimum fee was included.

For most everything else, 1 confirmation is really more than enough.

Bitcoin is best seen as a really really fast check, one that you can clearly see is "good" meaning it is "funded" and will not bounce, and one that you know will probably "clear" in an hour.

If your business accepts checks or credit cards as payment, you can probably accept bitcoin and know with a high degree of certainty that you will get paid.

1) Start your own cryptocurrency or create a hard-fork of bitcoin.
2) Invite people to move from bitcoin to "fastcoin"
3) Profit!

Isn't it easy?

A distributed system of payment channel servers could have the servers compete with each other in terms of prepayment fees. If there are too few servers and they have large fees in a cartel-like setup, new servers would quickly be added by other people around the world with lower fees. That will make the distributed system self-stabilizing and optimizing in terms of fees (costs for users). And the fees incentive would make sure that there will be enough servers to run the network. If the fees become too low, then many servers will be shut down, but many big merchants will make sure there are enough servers because their business depends on the system.

The fast off-chain transactions can then be done with zero transaction fees, since the fees have already been prepayed. This means minimal friction for the fast transactions all the way down to micropayments. Spam transactions would cost money due to the prepayment fees and will therefore be limited. If the fees go down to zero, then spam transactions would still be unproblematic since the system can handle a massive number of transactions per second. The fees also have a lower limit dependent on ordinary bitcoin transactions since the payment channel servers need to make bitcoin transactions to the block chain, and those ordinary transactions will likely have fees even in the future.

The distributed payment channel system allows both senders and recipients to interact in a full many-to-many way without the need for special payment channel servers for specific services. A customer paying at Starbucks, McDonald's and on an online gambling site can use the same single system.

To use the system the user only needs to prepay an amount of bitcoins to the system as a whole. An algorithm can automatically pick the server with the lowest fee. And the server will receive the fee gradually by performing transactions for the system as a whole and not only for that particular user.

The system needs to be trustless to prevent fraud servers to be able to steal bitcoins from people.

I suspect this is going to go one of 2 ways......

1.  Enough third party infrastructure will be built over the core protocol to make small transactions nearly instantaneous.  It is in the interest of the companies building the new ecosystem to increase transactional throughput as much as they can.

2.  If 1 doesn't happen quickly enough (and I suspect it will), an alt-currency with much faster block intervals will force those overseeing the protocol into a decision as to whether BTC is just for large value transactions or needs to change to respond.

I heard that shorter transaction times leads to more orphaned blocks. And someone said that Bitcoin will probably be used for large transactions. I think that may happen; that the block chain will still have 10 minutes transaction times and relatively few large transactions. And then a layer on top of Bitcoin will handle the fast and smaller transactions with payment channel servers or something similar.

So what we may have in the future are million dollar transactions on the block chain. And the large number of ordinary transactions handled on a layer above Bitcoin.

Maybe a system of distributed payment channel servers could be used. Then a user can prepay an amount of bitcoins to the payment channel system and use it for fast transactions to all recipients that are connected to the same system.

Oh noes! Unless Jeff Garzik meant some new kind of payment channel in the video I posted earlier, I found a big problem with it:

"Example 7: Rapidly-adjusted (micro)payments to a pre-determined party ... This protocol has been implemented in bitcoinj" -- https://en.bitcoin.it/wiki/Contracts#Example_7:_Rapidly-adjusted_.28micro.29payments_to_a_pre-determined_party

"This article describes how to use payment channels, a way to set up a pending transfer of value from one wallet to another such that the amount that will be transferred is incrementable at high speed and by very small amounts. Whilst this does not allow you to send micropayments at high speed to different recipients each time, many applications can fit within this framework - typically anything that involves micro-billing for a metered service." -- https://bitcoinj.github.io/working-with-micropayments

That's a serious limitation. The customer can only send microtransactions to ONE recipient. So, as I understand it, if you prepay say 0.1 bitcoins to do microtransactions with one company, you will have to make another prepayment in order to be able to do microtransactions with another company, and a third prepayment for a third company/service and so on. That actually sucks.

Relevant:
https://blockchain.info/charts/n-orphaned-blocks

I don't know though if it's daily orphaned blocks or hourly or what.